One thing you can be sure of is that if house prices are soaring, governments will be holding inquiries into it. Unfortunately, the other thing you can be sure of is that nothing will come of those inquiries.Why? Because their purpose is to express the government’s deep concern about the worsening affordability of homeownership – its heart-felt sympathy for young people struggling to buy their first home – not to tackle the problem.Why?...
Sunday, October 31, 2021
Friday, October 29, 2021
Praying for costless climate change: Lord, send down a miracle
Picture Scott Morrison kneeling by his bed, hands together, eyes closed, asking God to send him another miracle. Or maybe just giving Santa a list of all the things he’d like for Christmas.Five things, actually. First, technology not taxes. That is, a sudden, unforced flowering of new technology that allows us to go on selling our fossil fuel to the world while – at negligible cost – the technology eliminates all our net emissions...
Wednesday, October 27, 2021
Dearer houses: another problem we’re ‘learning to live with’
The poor relation in all our worries – about the pandemic, the economy, climate change – has been housing affordability. While everything else in the economy has been weak, house prices have been rocketing.I can tell you why they have, and I can say with confidence that house prices can’t keep rising at double-digit rates forever. But I can’t assure you we’ll ever get house prices to rise no faster than we find easy to afford,...
Monday, October 25, 2021
Morrison's deal: Nationals rewarded for agreeing to harm the regions
Let me be sure I’ve got this right. Scott Morrison is ending his Coalition’s deep divisions over climate change by agreeing to pay billions in regional boondoggles in return for the Nationals refusing to lift their veto of any increase in Australia’s commitment to reduce emissions by 2030.The usual way blackmail works is that the blackmailer returns to you something you really value in return for you paying the blackmailer an...
Friday, October 22, 2021
Morrison's budget report card: could do a hell of a lot better
When it comes to the relative strengths and weaknesses of the two main parties, polling shows voters’ views are highly stereotyped. For instance, the Liberals, being the party of business, are always better than Labor at handling money, including the budget. But this hardly seems to fit the performance of Scott Morrison and his Treasurer, Josh Frydenberg.Dr Mike Keating, former top econocrat and a former secretary of the Department...
Wednesday, October 20, 2021
Problems abound, but we could yet emerge as winners
As we begin to lift our heads and look beyond the lockdown, it’s easy to see the many other problems we face. It’s possible to view those problems with fear and disheartenment – and it suits the interests of many groups to play on our fears.But it’s almost as easy to see Australia as still a lucky country, with a populace that’s confident, resourceful, committed to the “fair go” and capable of co-operating to convert our problems...
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Monday, October 18, 2021
Nobel winners make economics more useful, not a parlour game
It turns out that, in economics, maths – like technology and much else – can be used for good or ill. The three academic economists (and one ghost) who won this year’s Nobel Prize in “economic science” used mathematics to make economics more realistic and thus more useful to society.The reason economics has become dominant among the social sciences – has had so much influence over the thinking and actions of governments - is...
Friday, October 15, 2021
The 'net' in net zero emissions offers a huge temptation to cheat
Perhaps the hardest part of reaching net zero emissions by 2050 is the “net”. We won’t get to zero emissions without it, but it’s tricky and presents us with a great temptation to turn the whole exercise into a rort.The goal is “net zero” because it’s neither possible nor sensible for us to eliminate every last emission of carbon dioxide and other greenhouse gases. But that won’t be a problem provided we can offset what few emissions...
Wednesday, October 13, 2021
We risk becoming a business kleptocracy, with pollies showing how
I was startled the other day to hear a mate saying he was a bit depressed by the thought that Australia was turning into a business kleptocracy. What? Surely not. But the more I thought about it, the more I realised he was on to something.I’ve written a lot in recent times about the failure of what lefty academics call “neoliberalism” and its quest for smaller government. Going back to the reign of the Howard government, both...
Monday, October 11, 2021
Fear is driving good economic policy out of the political market
When it comes to politicians, some are good shots and some are cheap shots. These days, the successful politicians – you wouldn’t call them leaders – have relied heavily on cheap shots. The cheapest being to spread fear.The simple truth is that humans have evolved to continually check their environment for threats. Those who weren’t so obsessively cautious died from some misadventure before they’d managed to have kids.One way...
Saturday, October 9, 2021
Cheapest, easiest way to reach net zero is to put a price on carbon
If Scott Morrison fails to front for the Glasgow climate conference at the end of the month, his preference to stay home while we’re dismantling the lockdown will be only one reason. The other’s that the conference isn’t looking like it’ll be a roaring success.You wouldn’t know it from all Morrison’s agonising over signing up to net zero carbon emissions by 2050, but it’s the easy bit. The hard part about Glasgow is the expectation...
Wednesday, October 6, 2021
Farmers have most to lose - or gain - from climate change
Doesn’t it strike you as strange that the born-again Scott Morrison – by now, presumably, deeply ashamed of his public fondling of a lump of coal during his unregenerate days – is being held back from signing up to the target of net zero carbon emissions by that fierce defender of farmers and rural Australia, the National Party?Farmers are, if you’ll forgive the expression, at the coal face of the damage climate change is doing...
Monday, October 4, 2021
The economy can self-correct, but only up to a point
As you’ve no doubt noticed, the crippling lockdowns in Sydney and Melbourne turn out to have one important side-benefit: NSW and Victoria have the highest rates of vaccination, which offers those states a path out of lockdown.By contrast, the other states – which sensibly closed their borders to people coming from the two highly infected states – have the advantage of not needing to lock down, but the disadvantage of low rates...
Friday, October 1, 2021
Economists need updating on what makes humans tick
At the heart of the weaknesses of economics – its frequently wrong predictions and the bad advice its high priests often give governments – is its primitive understanding – its “model” - of how and why humans behave the way they do.It’s taking economists far too long to realise that to understand how the economy works you’ve got to start by understanding how the people who make up the economy work. The model economists started...
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